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Poised for Takeoff

Fundamentals First

Alcatel, NEC and Nortel Networks all offer proprietary, and often expensive, wireless systems that integrate with their PBX systems. Some organizations might opt to use cell phones for mobile communications inside the organization, though this, too, is costly and in-building coverage can be spotty. Another popular solution is the use of licensed walkie-talkie-type private radio systems for internal communication.

VoWLAN systems aren't really new, either. SpectraLink, the current market leader, still earns a large proportion of its revenue from 900-MHz wireless LAN voice systems first introduced more than 10 years ago. However, system costs remained high until recently, when the company introduced its first phone priced less than $400. Deployment costs still can be high because organizations need broad radio coverage to take full advantage of VoWLAN. The data-focused hotspot conference-room and cafeteria deployments found in many organizations just don't cut it. If you are serious about VoWLAN, you'll need to design a WLAN that provides coverage everywhere, including elevators and stairwells.

Today's VoWLAN market is quite small, but growing quickly. According to a March 2003 report from communications research and analysis firm In-Stat/MDR, only 30,000 802.11 VoWLAN handsets were shipped in 2002, a number the firm predicts will triple in 2003. In-Stat/MDR doesn't think the market will reach 1 million units until 2007 (see "VoWLAN U.S. Handset and End-User Revenue Forecast," left).

However, we see a number of interesting factors conspiring to jump-start the market sooner. First, there's a new generation of WLAN infrastructure products designed from the start with telephony in mind. Second, Cisco Systems has entered the market with its slick new 7920 wireless VoIP phone that integrates with the company's mature VoIP product line. Cisco brings legitimacy to any emerging network market. Finally, we see a number of technical enhancements coming in 2004 and 2005 that will help overcome some of the limitations of current systems.

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